The Organisation of Petroleum Exporting Countries on Tuesday kicked against calls for the discontinuation of investments in the oil and gas industry, describing such calls as dangerous.
Secretary-General, OPEC, Sanusi Barkindo, spoke in a keynote address on ‘Global oil market dynamics in a decarbonising world’, at the 20th Nigeria Oil and Gas Conference and Exhibition in Abuja.
In his virtual address, the OPEC scribe said investors, environmental lobbyists and even some corporate boards were pressuring oil companies and governments to pursue radical policies and initiatives that could, in the end, be more disruptive than productive for the global energy industry.
He said, “There have recently even been calls for investments in oil and gas to be discontinued, which is a dangerous and unrealistic scenario. These voices have emerged particularly in the context of the net zero 2050 emissions discussions.
“The fact is, however, that oil and gas have an important role to play in the energy transition. Let me be clear, OPEC supports the need to reduce emissions, bolster efficiency and embrace innovation, but we must be aware of the risk we run of not adequately investing in the future of this industry.”
He said the sector was already dealing with the harsh impacts the COVID-19 pandemic had had on
investment, which declined by 30 per cent in 2020.
“If this were to continue, we could see demand exceed supply, posing a significant energy security risk to both producers and consumers. And this, of course, could result in knock-on effects for both the global economy and geopolitics,” Barkindo stated.
He further noted that although many of OPEC’s member countries had made good progress in diversifying their economies, many of them still relied primarily on revenue from their oil and gas assets to support their economic and social development.
The OPEC boss said achieving net zero emissions by 2050 was already a great challenge for advanced economies, some of whom had expressed their doubts about the reality of achieving the ambitious goal.
“And thus, for developing nations, it is even that much more daunting, particularly as they are occupied with ensuring their basic needs are met day in and day out. Each day is a challenge to simply put food on the
table and earn a decent living wage,” he said.
In terms of scale and timing, Barkindo said the 28-year period from now until 2050 was not adequate to achieve net zero emissions.
This, he said, was based on the scale of investments required, the availability of land, the required massive expansion of the electricity grid and a host of nearly 400 milestones that would need to be reached to achieve the net-zero goal.